Mercosur summit in Puerto Iguazú amid EU environmental demands and growing Uruguayan discontent

Leaders of the Mercosur countries are gathering in Puerto Iguazú, Argentina, for a summit without a comprehensive plan to address the European Union’s (EU) environmental requirements in the ongoing free trade agreement negotiations.

Uruguay, dissatisfied with Mercosur, is expressing its growing discontent.

The meeting will bring together the presidents of Argentina, Uruguay, Paraguay, and Brazil, with Brazil holding the bloc’s presidency until year-end.

Although the summit is significant for the Mercosur bloc, which represents a significant portion of South America’s population and GDP, it will not produce a detailed response to the leaked European environmental demands.

Mauricio Carvalho, the Brazilian Foreign Ministry’s secretary for Economic and Financial Affairs, stated that assessments would soon be presented to Mercosur partners, but time constraints will prevent a conclusion in Puerto Iguazú.

Brazil’s President Luiz Inácio Lula da Silva has criticized the EU’s additional environmental demands, particularly relating to agriculture and compliance with the Paris Climate Agreement.

Lula argued against threatening a strategic partner while discussing climate change financing in Paris, attended by French President Emmanuel Macron and German Chancellor Olaf Scholz.

Despite more than 20 years of negotiations, the EU-Mercosur free trade agreement reached in 2019 remains paralyzed due to resistance from some European agricultural sectors.

Lula’s opposition to the new EU demands seems to overshadow the EU’s optimism for concluding the agreement this year, as European Commission President Ursula von der Leyen expressed during her recent Latin America tour.

The summit might, at best, result in a concrete agenda with demands for the EU, according to Bruno Binetti, an international affairs expert.

However, he believes that stage has not yet been reached.

Meanwhile, Uruguay, the smallest economy in Mercosur, is becoming increasingly dissatisfied within the bloc, seeking an FTA with China and requesting entry into the Trans-Pacific Partnership without consulting other partners.

The Mercosur countries will have another meeting with the EU during the upcoming EU-Community of Latin American and Caribbean States (CELAC) summit in Brussels from July 17 to 18. The gathering marks the first EU-CELAC summit in eight years.

For the full picture, see our Mercosur EU Trade Deal: Complete Guide.

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